Is your pet peeve pet parents? Then you’re prohibiting premium profits!

With a growing number of pet owners around the world now referring to themselves as “pet parents”, consumer demand for items ranging from grain-free and frozen pet food, to licensed clothing and smartphone-controlled electronic toys are exhibiting strong growth. Pet parents will go to great lengths these days to ensure their “four-legged child” is happy and able to consume natural and organic foods for health and wellness reasons, just like everyone else in the household.

Pets are people too…right?

Which products have caught the premium zeitgeist in the pet care market over recent years? The gap between human and pet food continues to narrow.

In some ways, the premium pet food segment increasingly resembles the baby food market.

According to Euromonitor, the pet parenthood trend is percolating down from developed economies to middle-class, urban and westernized consumers in emerging markets, creating new markets for premium pet food and products.

The percentage of households owning a pet has increased slightly over the past few years, with data indicating an encouraging recent uptick in dog and cat ownership specifically.

Today, 45 million U.S. households own dogs, and 30 million households own cats according to Package Facts. Ironically, while the U.S. dog population is growing, it’s also getting smaller. Recent pet parent surveys indicate that a higher percentage of U.S. households have small dogs (under 25 lbs.) than medium dogs (25-40 lbs.) or large dogs (40+ lbs.), with the figures at 52%, 32%, and 42%, respectively. The percentage of pet owners with small and large dogs increased slightly, while those with medium dogs held steady.

Your dog or cat has doubled its value.

Over the past ten years, the average annual household spend per pet at retail is nearly twice as much. The total pet industry is growing at the same pace. Here’s the numbers according to the American Pet Product Association (APPA):

Total U.S. Pet Industry Expenditures

Year                 In Billions of dollars

>> 2015            $60.28

2014                 $58.04
2013                 $55.72
2012                 $53.33
2011                 $50.96
2010                 $48.35
2009                 $45.53
2008                 $43.20
2007                 $41.20
2006                 $38.50
>> 2005            $36.30

Pet parents prefer progressive premium.

Consumers that treat their pets as family members are more willing to invest and spend on products and services for their pets. Millennials, most of which consider their pets as “furry babies” rather than companions, are much more willing to spend more on their pets.

Data from the American Veterinary Medical Association in 2011 found that the correlation between the degree of human/animal bond and pet spending is directly related. Households that view their dogs as family members spent $438 on average at the vet, compared to $266 spent on average at the vet in households that just saw their dog as a pet/companion, and $190 on those who viewed their dog as property.

Pet retailers are becoming more involved with this new bond pet owners are experiencing. In 2013, Petco changed their tagline from “Where Healthy Pets Go” to “The Power of Together.” See the difference?

Humanization of pets means opportunity for retail.

Pet parents’ dedication to their pets’ health is driving new trends in the industry: according to marketresearch.com, 70% of pet owners are willing to spend extra to ensure the wellness of their pet. And, 30% of pet owners agreed that they prefer to shop at pet retailers that offer the best products available, even if it is more expensive.

The main premium product that is purchased is pet food. More expensive pet food is equated with a healthier product. This is something most pet owners will not give up, even in hard economic times.

The same trend is translating into the pet toy category. Toys made with materials such as organic cotton, hemp, wood, natural rubber and plant-based dyes, as well as recycled materials and BPA-free plastics, are now very much in demand. In addition, pet parents are increasingly leery of any products made in such countries as China. So toys that are made in the U.S. are big sellers.

Want to learn more?

Watch the recent Petcare B2B infocast on GMDCconnect.org by clicking the window below…

…or visit the GMDC content library to download the latest Pet retail next practice report featuring actionable category insights for your business.

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